NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Corporate Ownership Around the World

Rafael La Porta, Florencio Lopez-de-Silane, Andrei Shleifer

NBER Working Paper No. 6625
Issued in June 1998
NBER Program(s):   CF

We present data on ownership structures of large corporations in 27 wealthy economies, making an effort to identify ultimate controlling shareholders of these firms. We find that, except in economies with very good shareholder protection, relatively few of these firms are widely-held, in contrast to the Berle and Means image of ownership of the modern corporation. Rather, these firms are typically controlled by families or the State. Equity control by financial institutions or other widely-held corporations is less common. The controlling shareholders typically have the power over firms significantly in excess of their cash flow rights, primarily through the use of pyramids and participation in management. The results suggest that the principal agency problem in large corporations around the world is that of restricting expropriation of minority shareholders by the controlling shareholders, rather than that of restricting empire building by professional managers unaccountable to shareholders.

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Document Object Identifier (DOI): 10.3386/w6625

Published: Journal of Finance, Vol. 54, no. 2 (1999): 471-517. citation courtesy of

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